Court allows sale of Naivas to South Africa's Massmart

David Kimani Mukuha, one of Naivas Supermarket’s top shareholders with 25 per cent stake in the fourth largest retailer in Kenya. FILE
David Kimani Mukuha, one of Naivas Supermarket’s top shareholders with 25 per cent stake in the fourth largest retailer in Kenya. FILE 

The High Court Wednesday allowed the sale of a majority stake in Naivas Supermarkets to South African investors.

Justice Anyara Emukule declined to block the sale of a 51 per cent stake in the supermarket to Mass Mart Stores (MMS) of South Africa for an undisclosed sum, saying courts had a duty to allow Foreign Direct Investments (FDI) to flow into the country.

“As a court, I have an interest in seeing the economy grow where the court is not seen as an impediment to foreign investments. If the transaction between Naivas directors and the foreigners exists let it go on to fruition but demand full disclosure of the sums involved,” he said.

Earlier, lawyer Evans Ondieki for Newton Mukuha Kagira had urged the court to impose a stay pending hearing and determination of Naivas shareholding in a suit where Mr Kagira claims to have been disinherited by his four siblings.


“No shares in the million-shilling company should change hands before the case is heard and determined since my client risks being excluded. No one denies he is the son of Naivas Limited’s Chairman Peter Mukuha Kago who was also a major shareholder in Naivas,” he said.

Mr Ondieki informed the court that they were willing to opt for an out-of-court settlement where his client would pocket between Sh200 and 250 million before allowing the sale to go on.

But lawyer Francis Mwangi for Naivas Chairman Simon Gachwe opposed the assertion, saying Naivas was a private company with its two directors, Mr Gachwe and Kimani Mukuha, while Grace and Linet were part of its top management.

He maintained that Mr Kagira was a ‘stranger’ to the company and must not be allowed to interfere with its day-to-day operations.

Succession dispute

Naivas founder Peter Mukuha Kago died on May 6, 2010 aged 93 during after which a succession case was filed in court, with Mr Gachwe seeking to be the administrator of his father’s multimillion estate.

But Mr Kagira objected to the case as filed saying he had not been informed and that his name had been excluded with the sole intention of disinheriting him.

Papers filed in court show Mr Gachwe appeared before the Senior Resident Magistrate’s court where he estimated his father’s total estate to be Sh100,000 but Mr Kagira sought a review saying the late businessman had homes in Nairobi, Nakuru, Naivasha and Kitale and had money in various bank accounts with over Sh12 million.

The nonagenarian also enjoyed a 20 per cent stake in Naivas which he served as its chairman till his death.

Mr Gachwe’s application also contained a will written by their late father on the letterhead of Naivas showing how his property should be shared among his siblings but Mr Kagira strongly contested the will saying he had been excluded, especially on his father’s 20 per cent stake in Naivas where Gachwe and Kimani got four per cent shares each while his sisters Grace and Linet were allocated six per cent each.

This is besides their individual shares where Gachwe and Kimani own 25 per cent each, with their sisters Grace and Linet equally sharing the remaining 30 per cent stake.

On Wednesday, Mr Ondieki sought to stop the Naivas share sale negotiations with the South Africa conglomerate, saying his client ought to have been included in the share subdivision, thereby ensuring he enjoys a share of his father’s investment and his own 20 per cent investment done in 1989 when he provided Sh20,000 for the initial Sh100,000 seed money.

Mr Gachwe said Mr Ondieki had gone against Kikuyu customs where as a ‘Muramati’ (custodian), he was to preserve his father’s estate for his siblings but had opted to give some and deny others.

Citing documented tradition practices since 1610, the lawyer said a custodian offered guidance and leadership and was actually rewarded with a larger share if they did a good job.

“Kagira is not a shareholder of Naivas and has never been. Property belonging to his father was subdivided long ago and the other siblings united to form Naivas,” he said. (Naivas family disowns brother claiming 20pc stake)

The case has been deferred to November 11.